The increasing dominance of ecommerce has triggered a wave of panic throughout the retail industry. Revenue has declined for many department stores and small businesses, especially those who sell mainly to millennials. Some retailers, however, have managed to not only stay vital but actually benefit from the impact of technology on consumers. One example is the specialty cosmetics industry, which has reportedly experienced an increase in sales over the past few years. A small business owner might think that most of the success can only go to chains, since they obviously have more money to spend.
But thanks to companies like United Capital Source, small cosmetics retailers can utilize strategies similar to those of their largest competitors. A closer at these strategies will show that they while they do involve more money, they involve cutting certain expenses as well.
Try Before You Buy
Today’s young adults are often criticized for thinking they know everything. Store clerks are supposed to spend their days answering questions or informing customers about new products, but nowadays, there just aren’t as many questions to answer. Instead of going to a store for information, customers simply search the web to learn as much as possible about their next potential purchase. So, now that store clerks are no longer directly influencing purchasing decisions, cosmetics retailers must figure out another way to maintain the value of an in-store experience. Or another reason for someone to go to a store in the first place. The logical response is to emphasize the ability to physically touch store products.
Several cosmetics chains have found success with the “try before you buy” approach. With the help of a store clerk or on their own, customers are able to sample different products as they walk around the store. This has proven to make customers spend more time in the store and thus become more likely to spend more money. But it’s going to be difficult to implement the “try before you buy” approach if your store isn’t constantly stocked with plenty of different and new products.
Business Loans For Inventory Management
United Capital Source offers numerous cosmetics business loans that enable smaller stores to develop a consistent inventory delivery system. Fluctuations in revenue and sudden expenses can prevent stores from putting in orders at cyclical intervals so that new products are always coming in. But with a merchant cash advance or short-term working capital loan, you can gradually order more inventory or stay current on bills without having to make massive monthly payments right away. The former option lets you pay off the debt as you make more sales, which is the underlying goal of having more new products on display.
A business lines of credit might be a better choice if you are looking to order more inventory that will likely be sold shortly afterwards. Borrowers often turn to a business line of credit to capitalize on a new trend in consumer behavior. Approval is much more likely when you apply well before the line of credit is needed, i.e. when you have plenty of inventory in stock but aren’t sure how each product will perform.
There’s An App For That
Another way some cosmetic chains keep people in their stores is technology. At one Sephora in New York City, a device can scan customers’ faces and tell them which products to buy based on their skin tone. Down the aisle is a touch screen in which customers can smell different scents to get an idea of the fragrances they might want. Sephora even has an app that uses augmented reality to let users “try on” different shades of lipstick. As you can see, there is a lot of new technology geared towards young consumers of cosmetics. Before visiting a store, these consumers are more likely to visit your website, app and social media accounts.
Hiring a specialist to build an app, update a website and/or monitor social media accounts costs money but United Capital Source specializes in increasing staff the moment it becomes necessary. A merchant cash advance might make the most sense for this situation because digital efforts typically do not increase revenue right away. Cosmetics stores also typically perform consistent debit and credit card transactions on a regular basis. You could hire your specialist in the months leading into a busy period since your repayments wouldn’t obstruct you from paying your specialist every month.
Lightening The Blow
We are not like other business lenders in that in addition to quick funding, we provide a concrete plan for how to better manage your expenses. When a client is poised to take on one or more bigger expenses, we discuss how expenses can be cut to lighten the blow. Staying current on bills or paying vendors upfront, for example, makes you eligible for discounts. Digital marketing may let you trim your budget for other forms of advertising, and technological tools might require the need for less store clerks. Either way, we will make sure you are not spending more money than you should in any element of your business. It is highly recommended that you get a head start with this before applying, because the more sensible your expenses are, the more money you will likely be able to borrow.